After U.S. President Donald Trump’s recent threat to significantly increase tariffs on Indian goods over India’s import of Russian oil, analysts are speculating on how far these tariffs might actually turns-up.
Trump’s warning came during heightened tensions as India is trying to protect the welfare of their own citizen. Moreover, India is safeguarding its long-term energy requirement, citing global market realities and national security.
Though the current tariff announced by the President Donald Trump on Indian imports stands at around 25%, here are five potential scenarios for tariff hikes and their consequences:
Scenario 1: Moderate Increase to 30-35%
A moderate rise would send a firm message without strictly disrupting U.S.-India trade ties. It might target key sectors like textiles and pharmaceuticals where Indian exports to the U.S. are substantial. This level could rise costs for American importers but stop rapid trade war between two countries.
Scenario 2: Significant Hike to 40-50%
A substantial rise could escalate tensions between India and US, thus affecting Indian exporters and pushing businesses to look for alternative markets. This step could be a negotiating method by Trump to pressure India to restrict their import of Russian oil.
Scenario 3: Maximum Tariffs Beyond 50%
Going beyond 50% tariffs would be a strong punitive measure, likely to trigger retaliation from India and harm bilateral relations. It could harshly impact Indian exporters but may also offend American companies dependent on Indian supply chains.
Scenario 4: Targeted Tariffs on Specific Sectors
Instead of a blanket increase in tariffs, Donald Trump may impose very high tariffs on select products linked to political leverage, such as steel, chemicals, or textiles. However, not touching others, which will minimize overall damage to the trade.
Scenario 5: Symbolic or Threat-Level Tariffs
Finally, Donald Trump could choose for symbolic tariff hikes primarily to project strength without extending economic harm. Such tariffs would be enough to register displeasure but restricted in scope and duration.
India, however, continues to say that its oil imports are much needed due to global market conditions. The Ministry of External Affairs emphasized that many Western nations continue trade with Russia, highlighting the complex geopolitical backdrop.
As this situation evolves, the scale and focus of any tariff increase will be closely watched by global markets and policymakers.
Also Read: Why Global Oil Markets Just Shuddered: OPEC+ To Raise Output In September Amid Geopolitical Tensions
Ankur Mishra is a journalist who covers an extensive range of news, from business, stock markets, IPOs to geopolitics, world affairs, international crises, and general news. With over a decade of experience in the business domain, Ankur has been associated with some of the reputed media brands. Through a sharp eye on global marketplaces along with deep insights and analysis of business strategies, Ankur brings simplicity to the complex economic matrix to decode market trends and empower people.
He is committed to entrenched data, facts, research, solutions, and a dedication to value-based journalism. He has covered trade tariff wars, international alliances, corporate policies, government initiatives, regulatory developments, along with micro- and macroeconomic shifts impacting global fiscal dynamics.
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